Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Qualcomm Moderated Thread - please read rules before posting -- Ignore unavailable to you. Want to Upgrade?

To: pyslent who wrote (81161)	10/17/2008 2:43:25 PM
From: David E. Taylor	Read Replies (1) \| Respond to of 197623

I agree with what you said about the royalty rate. When I figured the minimum upfront payment due from NOK handset sales, I used the average rate of 4.2% derived from past QTL financials. CSA got to their $430 million owed using the 2% royalty rate that they figured would apply going forwards. My guess is that both NOK and QCOM can likely use whatever they want for that rate to get the "past due" amount. It'll be interesting to see how much (if anything) QCOM decides to book into Q1 FY2009 as a one time payment for 6 quarters of past royalties due. If the settlement agreement provides the requisite accounting wiggle room, they could just forgo that option and amortize the entire amount over 15 years. They weren't going to book much anyway to the one-time Q4. From the stock price perspective, we shareholders will get the most out of this payment if they don't take any of it one time into Q1 and just amortize the entire amount over future quarters. But, I think they have the flexibility accounting wise to add an arbitrary amount into Q1 if they need it to shore up a not so good quarter. Nice to have the flexibility. Hopefully we'll get some guidance on 11/5/08. David